"Is This Really a Thing?" Podcast Archives - Barry S. Miller College of Business

Paul Jarley:                         This is a story of a man who was ahead of his time. Some say that he had the most important idea of the last 500 years. He may very well have helped to invent the future. He most certainly understood the role trust plays in our modern economy. And he was of all things, a mild mannered accounting professor.

Paul Jarley:                         This show is all about separating hype from fundamental change. I’m Paul Jarley, Dean of the College of Business here at UCF. I’ve got lots of questions. To get answers, I’m talking to people with interesting insights into the future of business. Have you ever wondered, “Is this really a thing?”. On to our show. [music]`

Paul Jarley:                         A few months ago, I received an email from Mike Johnson. Mike is Dean of the College of Sciences and more importantly, my drinking buddy. The subject line read, Innovations in Accounting. Who knew? I opened the email and clicked on the link to an article entitled, “Why Everyone Missed the Most Important Invention of the Last 500 Years”. I was skimming the article when Greg Trompeter walked into my office. Greg is the director of the Dixon School of Accounting, and so I turned to him and said, “Hey Greg, have you ever heard of triple entry bookkeeping?”

Greg Trompeter:              (laughs). Triple entry bookkeeping.

Paul Jarley:                         Indeed he had.

Greg Trompeter:              It’s an idea that came up, maybe in the mid to late 1970s. There was a professor at Carnegie Mellon. His name is Yuji Ijiri and he came up with a notion that for four or five hundred years people had been using double entry bookkeeping as if it were perfection itself. He said, “Well, maybe you could make it better”.

Paul Jarley:                         Okay, let’s stop right there. I realize a podcast in accounting theory is a bold move. But Dr. Ijiri was quite the dude. His obituary notes he was interested in things like the relationship between accounting, quantum physics, and quantum computing. How many people do you think are trying to connect those dots? He didn’t strike me as the kind of guy who would waste his time on frivolous pursuits.

Yuji Ijiri:                               Bookkeeping evolved from single entry, which just recorded what happened, to a double entry, where what happened has to be explained by reasoning.

Paul Jarley:                         Dr. Ijiri might be dead, but in the miracle of today’s modern technology, he left behind a YouTube video explaining his ideas around triple entry bookkeeping.

Yuji Ijiri:                               I get attracted by three. Everything three is very interesting and much more complex than two. And what the triple entry might look like.

Paul Jarley:                         He challenged a group of Ph.D. students to figure this out. 10 years lapsed, when he realized…

Yuji Ijiri:                               Nobody is doing anything about it. (laughs).

Paul Jarley:                         So he decided to take matters into his own hands. Yuji wrote two books on the subject. The second of which…

Yuji Ijiri:                               bases on the calculus of taking a type of derivative of existing accounting and come up with a new dimension and then create the double entry at that level. I think it has a lot of applications…

Paul Jarley:                         I know that seems esoteric, but Dr. Ijiri’s ideas might just rock your world. As Greg explains, changes in accounting facilitated changes in markets and significantly impacted the geographic scope of trade.

Paul Jarley:                         A brief history lesson…

Greg Trompeter:              The Sumerians, I believe, invented single entry bookkeeping. So describe single entry bookkeeping for me.

Paul Jarley:                         Basically keeping track of my cash. It was really simple. At the end of the day, you sort of balanced out your cash.

Greg Trompeter:              That would have been single entry bookkeeping. And it had a problem with…there could be errors that wouldn’t be caught. And there was less accountability. It was really difficult to check on any assets or any liabilities you have other than cash.

Paul Jarley:                         So your single entry accountant, was probably a relative.

Greg Trompeter:              Yeah. And the ventures you were involved in were probably very local.

Paul Jarley:                         It wasn’t just the that boundaries of trade were expanding. Owners started hiring managers to run the business on their behalf.

Greg Trompeter:              Somebody other than the manager is the owner. So you had this agency problem where the owners have to have the ability to trust the managers and so trust becomes a bigger issue, enterprises get larger, it’s easier to screw up the books. So double entry bookkeeping did a couple of things. At the simplest level, double entry bookkeeping made it so that debits had to equal credits, assets had to equal liabilities plus owners’ equity. So at the end of the day, there was an internal check on the accuracy of the records.

Greg Trompeter:              But perhaps more importantly, it gave you better controls.

Paul Jarley:                         [music] The first book on double entry bookkeeping was published in 1494. A lot has happened since then. Publicly held companies came along, auditors followed. Their job is to make sure what is being reported actually happened. And that investors aren’t being duped. Government regulations followed, lots of them. 500 years later, double entry bookkeeping still rules. It’s been a remarkable run that’s facilitated trust in our financial network. But it’s an inherently backwards system.

M. Fernandez: Everything is looked at historically.

Paul Jarley:                         Listen to Melanie Fernandez, a partner at BDO and a College of Business Hall of Fame member.

M. Fernandez: That’s probably the biggest complaint that I get as an auditor, is, can’t you have more real time information that is reliable and has been certified.

Paul Jarley:                         Dr. Ijiri thought he could help by introducing calculus notions into accounting, what he calls, momentum accounting.

Greg Trompeter:              He argued that assets and liabilities is where we are today, owners’ equity is the accumulation of where the company has come from in the past. And the third entry force, he called it, would be tied to how we were doing in the future. So if you think about his financial statements that would come out from the triple entry, you would have a balance sheet, which is at a point in time: this is assets, liabilities and owners’ equity. Then you have the income statement, which sort of explains using cool accounting, how we get from one balance sheet to the next balance sheet. So the income statement is sort of like the first difference.

Paul Jarley:                         Right.

Greg Trompeter:              Then his notion of momentum, forced acceleration, taking us more into the world of calculus and physics, was sort of why last year’s income was different from this year’s income. Much the same way the income statement explains why last year’s balance sheet was different from this year’s balance sheet.

Paul Jarley:                         Which might be of more interest to a financial investor.

Greg Trompeter:              Absolutely. One of Ijiri’s points was that investors … if in fact the statement just showed that the momentum was this year’s income is $30 bigger than last year’s income, you can do that easily enough. But if the bookkeeping system actually tracked why it was different, and we could see sales were up in part because it was an increase in prices, partly because it was an increase in volume. That would actually be useful information to an investor, to see why are profits up? And to highlight that on the face of the financial statement.

Paul Jarley:                         Sorry for the accounting lesson. It will pay off later when our story takes a sharp turn. Stay with me people. My next stop is Paul Gregg.

Paul Jarley:                         So Paul, would momentum accounting help investors, or can they get that information by other means.

Paul Gregg:                        They know some of it.

Paul Jarley:                         Paul is an executive in residence in our finance department. He has a wealth of experience and currently serves as CFO of Rini Technologies.

Paul Gregg:                        So let’s take Apple. Apple discloses in their 10K the unit sales of things like iPhones and iPods. And so one could track those, but the question is, what are they going to be in the future? And then one could say, well let’s take Microsoft as an example of where we were all buying our first pc and they had an extremely high growth rate. That ultimately leveled off. That’s typically what happens to big corporations that they may go through periods of extreme growth, and then they level off. And when you’re trying to figure out what those future sales and earnings and cash flows will be, the question is how long will they grow at hyper growth and at what point will they level off. That’s where, using calculus and other regression tools could help one in saying, well what would be the case for the iPhone compared to the case for Microsoft and what would that predict by way of when Apple’s growth will start leveling off because we had a similar anomaly when Microsoft was starting off.

Paul Jarley:                         When I was listening to Gregg, I couldn’t help but think about our Bloomberg terminals. Would you be able to do those kinds of analyses using the data that Bloomberg provides today?

Paul Gregg:                        Absolutely.

Paul Jarley:                         I can’t help but think that Dr. Ijiri might have invented economy information systems. If computers had been just a little more advanced when he started his work. The timeline is important. Yuji’s second book on triple entry accounting came out just two years after the first version of Microsoft Excel for Windows. We’ve come a long way since then. Back to Paul.

Paul Gregg:                        Systems that we use from Oracle to PeopleSoft

Paul Jarley:                         Yeah, yeah.

Paul Gregg:                        [inaudible 00:09:28] They’re all providing the type of management information systems. But corporations that spend millions of dollars for these systems are integrating the fine-tuned reporting data that they need.

Paul Jarley:                         That Dr Ijiri would’ve asked for.

Paul Gregg:                        It’s not just debits and credits.

Paul Jarley:                         That’s not to say there aren’t weaknesses in today’s financial reporting system. Judgment still plays a large role. Managers sometimes manipulate earnings. And people lie for personal gain.

Paul Gregg:                        But many of my clients push the edge, and frankly I think it’s a problem where the auditors either didn’t do enough work or turned the other way in order to keep the client. From management standpoint, the pressure to hit earnings is immense, from a performance goals and compensation, and maintaining the stock price. The pressure is there. A lot of it is in the revenue recognition area where companies have some ability to manipulate revenues, and recognizing revenues. A very complex area of accounting. Some of it’s just outright fraud, like Worldcom where they were basically capitalizing expenses and calling it a capital budget item instead of a pure expense which is what it was. And it materially distorted the cash flow statement and income statement.

Paul Jarley:                         Ah, now this is where our story takes a sharp turn. I’m sure trust was on Dr. Ijiri’s mind when he was developing his triple entry system, but hardly anybody was listening. 16 years after Yuji’s second book, a financial cryptographer named Ian Grigg, published a working paper entitled, “Triple entry accounting.”

Ian Grigg:                            [Music] Triple entry takes us from this inside the corporate trusted scenario and extends it to other customers, to outside the company border into other companies.

Paul Jarley:                         Listen to Ian explain his key ideas.

Ian Grigg:                            What we can now do is cryptographically sign an entry, Alice assigns her payment to Bob. It goes out to some intermediary, which could be the blockchain, it could be a server, …

Paul Jarley:                         No, did you just hear that?

Ian Grigg:                            Which gets signed again and then goes across to Bob. And now we’ve got three entries which are sitting there. We’ve got Alice and Bob sitting with their primary copies and if they have any dispute, Ivan or the blockchain is sitting in the middle, which guarantees that we’ve all got the same thing.

Paul Jarley:                         Welcome to blockchain. Bitcoin is released less than four years after Ian’s paper. Now, the article Dr. Johnson sent me speculated that someone read Professor Ijiri’s work as well as Ian’s paper, and produced Bitcoin. Ah, maybe. But I can tell you that Grigg’s paper doesn’t even reference Ijiri, and as Gregg and I discussed…

Ian Grigg:                            It happens all the time in our world, where people from very different fields are working on very similar ideas and don’t even know it.[crosstalk 00:12:25]

Paul Jarley:                         And don’t even know it.[crosstalk 00:12:25] Sorry Yuji. Ian seems to have come up with his ideas independently, and I can’t sew where understanding your triple entry accounting system was necessary to create Bitcoin. If you’re an academic like me, you can’t help but feel sorry for Dr. Ijiri. What happened to him seriously sucked. But none of this means that blockchain won’t have a major impact on the accounting profession and the future of trade. In some ways, you could think of today’s podcast as the second part of our podcast on bitcoin. In that podcast, we mentioned that blockchain had the potential to severely limit the company’s ability to cook the books. Paul Gregg agrees.

Paul Gregg:                        It will make verification easier.

Paul Jarley:                         Much easier.

Paul Gregg:                        Because today.. before we had blockchain the transactions are documented except that I had my bank and my bank records and you have –

Paul Jarley:                         Exactly.

Paul Gregg:                        Your bank and your bank records.

Paul Jarley:                         I’ll put mine as my business.

Paul Gregg:                        So we know from each other’s side. But there are plenty of instances – AIG comes to mind – where there was a transaction that Warren Buffet’s insurance companies booked conservatively, and AIG took an aggressive stance which was not in accordance with GAAP in order to book the earnings immediately.

Paul Jarley:                         Okay. If two companies entries on a transaction are simultaneously verified in real time, what is there left for auditors to do. Trust seems to be built right into the blockchain. When I asked Jim Adamczyk, vice president of Fairwinds Credit Union this question, as part of my interviews on bitcoin, he took the fifth.

Jim Adamczyk:                  I’m not answering that question [laughter] – no. It could make their job more efficient and more transparent.

Paul Jarley:                         Greg is a bit more forthcoming,

Greg Trompeter:              If in fact blockchain takes off as some people say it will. You’ll need auditors to redouble their efforts on control testing. If once something goes into the system it can’t be changed, you want to make sure that what goes into the system is right, so internal controls are going to become even more important than they have been in this post Sarbanes Oxley era.

Paul Jarley:                         It’s also worth noting that blockchain isn’t the only high tech way to reduce fraud. Accounting firms are also investing in big data. Back to Melanie.

M. Fernandez: Initially we’ll be using it to bring in the data and look at it in different ways that will highlight unusual trends, anomalies things that we might not have looked at just from a person trying to analyze data using the human mind to really uncover whether there’s fraud. I mean that’s really kind of the whole purpose of getting the money and all this training and everything is to really be able to make it easier to identify situations where there’s higher risk or just outright fraud that may have occurred. I think there’s some jobs for people out there that really enjoy that stuff and understand that stuff.

Paul Jarley:                         Greg agrees.

Greg Trompeter:              I also think though you’re going to find accountants are going to be needing a lot more background in inferential statistics and analytical modeling. That’s going to become much more important for auditors.

Paul Jarley:                         Time to get to the bottom line. Is Yuji’s triple entry bookkeeping system a thing? From Greg Trumpeter.

Greg Trompeter:              I’m guessing his thing is not a thing. But I also know it took over a hundred years before double entry bookkeeping caught on.

Paul Jarley:                         From Melanie Fernandez

M. Fernandez: I’ve never heard of it. I’ve never heard of triple entry bookkeeping.

Paul Jarley:                         From Paul Gregg.

Paul Gregg:                        No, I think what will happen is we’re continuing to have more sophisticated reporting and disclosures that allow analysts to better forecast the result to the company.

Paul Jarley:                         It’s my podcast so I get to go last. If only Ian had footnoted Yuji I would be singing his praises as the inspiration for blockchain. But he didn’t. And ERP systems ran past any notions of momentum accounting. There was only one thing left for me to do.

Paul Jarley:                         [background noise] Do you remember that email you sent me a while back about innovations in accounting?

Paul Jarley:                         When we completed this podcast, I went straight to the bar with Mike Johnson.

Mike Johnson:                  You’re talking about triple entry bookkeeping …

Paul Jarley:                         I am indeed.

Mike Johnson:                  The most important invention in human history.

Paul Jarley:                         You owe me a bourbon over sending me down a rabbit hole.

Mike Johnson:                  I’m happy to pay you the bourbon.

Paul Jarley:                         It’s Woodford Reserve by the way.

Paul Jarley:                         So what’s your take? Check us out online and share your thoughts at business.ucf.edu/podcast. You can also find extended interviews with our guests and notes from the show.

Paul Jarley:                         Special thanks to my producer, Josh Miranda, and the whole team at the office of outreach and engagement here at the UCF College of Business.

Paul Jarley:         And thank you for listening. Until next time, charge on. [music]

The post Is Triple-Entry Accounting Really a Thing? appeared first on Barry S. Miller College of Business.

Paul Jarley: You remember that, right? Well, video games have come a long way since then. It’s no longer just guys playing in their moms’ basements. Now teams play in their own arenas. They’re ranked in coach’s polls, have television contracts and even their own sneakers. 380 million people say they are fans. The China championship sold 80,000 tickets in one minute. Your son or daughter likely has a favorite team. Danny White and Dale Whittaker would do well to help the UCF Gaming Knights be part of this global phenomenon. The college experience is changing my friends, welcome to e-sports.

This show is all about separating hype from fundamental change. I’m Paul Jarley, dean of the College of Business here at UCF. I’ve got lots of questions. To get answers, I’m talking to people with interesting insights into to the future of business. Have you ever wondered, is this really a thing? Onto our show…

Danny White: We feel strongly that we have every right to claim the national championship and that’s why we’re doing it.

Shaquem Griffin: You know, the only things we can do is win games and we won all of them. If you want to put one more in front of us, we’ll probably win that one too.

Jarley: Yes, we’re the self-proclaimed national champions of college football. And unless you’ve in a closet for the last six months, you know Shaquem Griffin’s story. It was a great year to be a UCF Knight. But I sometimes wonder if college football isn’t really the last war. Maybe the next war is e-sports.

E-sports? Listen in. No that’s not a crowd reacting to a Justin Upton homer. It’s Justin Wong making an epic comeback in a game of Street Fighter in 2004. Ask any 16-year-old boy about e-sports, and whether UCF should field a team, and you get an answer like this.

Spencer: It’s a great idea, honestly, I’d watch it.

Jarley: Trust me that’s Spencer being excited. He’s a man of few words and in fairness to him, I was interrupting his game of Fortnite, so I kept my interrogation short.

Jarley Interviewing: And how much would you pay to go to an event?

Spencer: However much it would take I guess, how much they would charge.

Jarley: I needed to get up to speed on this whole e-sports thing. So I went to visit Ben Noel. Ben is a former EA Sports executive and currently heads up UCF’s Florida Interactive Entertainment Academy. That’s our nationally renowned video gaming program in Downtown Orlando.

Jarley Interviewing: So Ben, I know you’ve been in the gaming industry for quite a while. What is e-sports?

Noel: Well e-sports is short for electronic sports and it was basically, you’re playing competitive gaming.

Jarley: Calling video games sports? Now I know what you’re thinking, “that’s kind of a stretch.” But Ben says that the level of skill and teamwork actually makes the two kind of similar.

Noel: It’s usually team based and it’s online and it’s usually played globally. And it never really became big until we had the internet that could allow for such things.

Jarley: Big is an understatement

Schiller: Globally there’s over 380 million that self-identify as e-sport fans.

Jarley: Listen to Tony Schiller, Executive Vice President and Partner at Paragon Marketing Group

Schiller: We help big brands like Gatorade, PNC Bank, and Yokohama Tires and many, many more. We help big banks engage with their target audience and it’s all about the affinity that the target audience has. It’s mind blowing. You know, there are events at the United Center of Chicago, at Madison Square Garden in New York, the Staples Center in Los Angeles that go on sale, e-sports tournaments and they go on sale, and within half an hour, hour or two hours they are sold out clean. And that’s 20,000 people paying money to watch a few people down at center court basically, playing a video game.

Jarley: 20,000 tickets ain’t nothing. Listen to Rich Lapchick, Director of the DeVos Sports Business Management program here at UCF.

Lapchick: Eighty thousand tickets were sold to the China championship in one minute.

Jarley: And then there’s this nugget from Mike Redlick, Director of External Affairs for the DeVos program

Redlick: The athletic shoe companies are now coming out with actual gaming shoes for players. They have their own specific type of shoe.

Jarley: Yes they do, K-Swiss is designing a pair of sneakers for an e-sports team called The Immortals. You can expect them to be on shelves and display in December for the bargain price of $110 a pair. I don’t need anymore evidence than this, e-sports is definitely a thing. But that doesn’t mean it’s a college thing.

Should colleges nurture this? Should it become a varsity sport? Should the NCAA get involved? It was time to get a students view. So I searched out the president of the UCF Gaming Knights, Abiel Payano to get his take on this.

Jarley interviewing: Thanks for doing this…we’ll try to make it painless.

Payano: Thank you for having me.

Jarley: Abiel is a student majoring in psychology here at UCF. His Gaming Knights has about 120 dues paying members. Making it one of the largest student organizations on campus.

Jarley interviewing: Suppose someone came up to you and said, “we want to recruit you to the UCF e-sports team that is going to play in the American athletic conference just like the football and basketball team do and we’re offering scholarship money for you.” Would you take that deal? Do you think e-sports is going to go that way?

Payano: I think it very much has the potential. Florida itself is a little behind on that note, for e-sports. But if we were to get that offer, we would definitely try to take that offer, if possible, because scholarships are a goal for collegiate e-sports.

Jarley interviewing: So you can imagine a day when maybe in addition to football team and a basketball team, we have an e-sports team.

Payano: Yeah, very much. If you look at examples like, I believe its Oklahoma State, they have an e-sports arena built for them already.

Jarley: He’s right, we’re behind. More than 70 universities offer scholarships to the varsity e-sports teams. Even campus libraries are giving way to e-sports. Boise State for example has cleared 3,000 square feet of its library and devoted it to its e-sports team.

And then there’s the Big 10.

Audio: Hello and welcome to the second broadcast of the 2017 Big 10 network League of Legends.

Jarley: The Big 10 fielded a competition among all 14 schools that was broadcast on the Big 10 Network and gave out 500 thousand dollars in scholarship money. So why aren’t we trying to get into the League of Legends top 25 coach’s poll right now? Well, e-sports has issues.

Issue one, violent games with fickle fan bases, Tony Schiller

Tony: A lot of these games are shooter games and that should be something that the NCAA and universities contemplate very deeply. Relative to is this something we want to be a part of? Introducing violence within e-sports into our campuses. If you know e-sports a game like Fortnite, which is at mass hysteria levels now, and I don’t mean to denigrate the game but in a year or two Fortnite may not be the game anymore. So, does the NCAA utilize one game? Does the game constantly evolve? And there’s different publishers who are part of the NCAA pool.

Jarley: Abiel on the other hand, thinks that’s all manageable.

Payano: I’ll use the Smash series as an example. Melee has been out since 2001. It’s been 17 years and people are still playing that game and it still has an insane amount of following. There are active tournaments and there are major tournaments every other week practically.

Jarley: Issue 2

Audio: *Rage, yelling and profanity*

Jarley: Yeah, that…Ben Noel.

Noel: When they go online and go on to these environments its like their own fight club. They can smack talk and use inappropriate language that they wouldn’t use in a classroom.

Jarley: Abiel agrees but he knows gamers can be self-regulated.

Payano: We’ve had to deal with our own toxicity in sportsmanship within our events. For example we use to have a bad relationship with the CSGO community, that’s Counter Strike: Global Offensive. We had an issue with them during a tournament where they were yelling at each other from across the room and that doesn’t help an open casual event flow properly. It doesn’t feel great. It wasn’t fun to be there. So we had to talk to them and then we didn’t host tournaments for them for a bit as a form of punishment or just negligence. But now we’ve reconnected and they’re one of our e-sports team.

Jarley: Issue 3: It’s a bunch of white guys playing in their mom’s basement. Rich Lapchick.

Lapchick: The concept of e-sports is a team sport, if you don’t play together as a team you’re not going to win. So depending on who’s on the team, if it’s five white guys, the power of the huddle is going to be limited to that. It’s going to draw them together and make them closer, but when I talk about the power of the huddle, my concern is about what people look like, where they are from, what they believe, and coming together in that huddle. And at this stage, although there are a fair number of people of color playing e-sports I’m told that that’s not really an issue, especially globally.

Jarley: But Abiel says that things are changing.

Payano: Most of our teams, if it’s a team of six, they’ll have one or two females participating on that team, just because they’re the best.

Jarley: Issue 4 PEDs. The suppliers don’t just juice the participants, they sponsor the events. Rich Lapchick.

Lapchick: Adderall is very commonly used, anti sleep pills are used, energy drinks are consumed. Monster Energy is actually sponsoring the UCF team.

Jarley: Issue 5, the establishment, meaning they’re not athletes and it’s not a sport. Danny White is UCF’s athletic director.

White: As part of intercollegiate athletics, calling them athletes and e-athletes, I just don’t think that sends the right message to our student athletes who spend so much time and invest so much of themselves physically and mentally and the experience that they get from a leadership standpoint, being a part of a team in a sport… In my mind you can’t replicate that in gaming.

Jarley: Don’t get the wrong idea, Danny thinks there’s a place for e-sports on campus, just not in the athletics department. He likens it more toward our student competitions in professional sales or cyber-security. But nobody is buying tickets to cyber-security or sales competitions, despite the fact that UCF has won national championships in both of these areas too. Nor are these academic competitions being broadcast on something like Twitch TV. Twitch is the e-sports streaming channel, e-sports’ huge fan base and marketing potential has Danny White the Athletic Director interested in e-sports as a way to promote his teams and help drive his bottom line.

White: Everybody has kind of a similar interest that we’re seeing out of pro sports. I know the Magic are actively engaged with e-sports as it relates to building a fan base, as it relates to even filling a venue.

Jarley: I’m not sure that’s going to work. Listen to Abiel.

Payano: For example I used to play basketball and football when I was younger. But I don’t exactly find playing Madden or NBA2K on Xbox or PS4 to be as fun as actually playing it. Playing the team sport like Madden or 2K while sitting down on a controller kind of doesn’t feel right to me.

Jarley: and Tony Schiller notes NBA2K just hasn’t lived up to expectations yet.

Schiller: However the NBA marketing machine hasn’t really been targeted against 2K yet and once the NBA start leveraging all of their marketing resources against 2K, I think you’ll see a lift. But with that said the numbers have been pretty low.

Jarley: Issue 6. Why not just turn pro? There’s a ton of money in it. But as Tony Schiller explains, there’s a potential role for colleges both in player development and marketing the sport.

Schiller: You may want to create a technology environment that supports the student athletes and treats them like student athletes and provide them with the resources. Whether it’s technology, whether it’s sports psychology, whether it’s nutrition, whether it’s fitness. Provide these student athletes with the same level of resource and support that other programs would have. Potentially you might want to create your own tournament and host a tournament.

Noel: I would question that.

Jarley: Ben agrees that colleges could theoretically provide the player development pieces e-sports athletes need. But he thinks it’s going to be an uphill battle.

Noel: If we wanted to get into MMA or boxing, we could do it. Fraternities would have boxing clubs and stuff like that but it’s not going to make a whole lot of money because it’s not playing it at the highest level. And so, you have a professional e-sports league and these people are very good, they’re pros, they’re the best in the world at doing it, those are the ones that people want to watch. Using the brand of a college, you know, to compete against each other, I could see something there, of a college competition, but I don’t see it being near as big.

Jarley: Issue 7, the NCAA. They’re considering getting in, but hardly anyone thinks that’s a good idea. Let’s not beat a dead horse here. Danny White.

White: As a membership, we’re struggling to regulate what we currently have in the NCAA.

Jarley: Rich Lapchick is even more blunt.

Lapchick: I don’t have a lot of faith that the NCAA is in the position to monitor a lot of the things that they monitor. So this so different, so new, I’m not sure if they would be in the position to do it.

Jarley: The lone dissenter is Tony Schiller.

Schiller: The NCAA is an entity that is focused on revenue, and there is a lot of revenue, and it’s growing exponentially in terms of sponsorship, in terms of advertising, in terms of ticket sales so I think that is one of the drivers why the NCAA will want to be there.

Jarley: Whether the NCAA figures it out or not, the DeVos program has plenty of young talent to help manage e-sports. As Mike Redlick notes, it’s already creeping into the curriculum.

Redlick: ESPN two years ago came to us and we have a partnership with them at the DeVos program and ESPN asked us to have a real world experience project for our students where they would determine to what extent ESPN should actually become involved with e-sports. Broadcast e-sports, coverage, etc. The students were thrilled, they felt that ESPN should be devoting a good portion of their coverage to them.

Jarley: And as Rich notes, students are eager to get jobs in the industry.

Lapchick: My personal GA this semester, who is just fantastic, he would like a career in e-sports.

Jarley: Mike agrees, noting lots of students want to get into the industry.

Redlick: I think the percentage is extremely high. I walk into the classroom, and I talk to our students about more traditional sports like baseball or anything that has a demographic that they’re not a part of and the interest isn’t really there. If I talk to them about a job in e-sports, they’re all excited, the buzz goes around the room immediately.

Jarley: Time to get to the bottom line. Is e-sports going to be a thing on college campuses like college football or basketball? From Tony Schiller

Schiller: The answer is simply yes.

Jarley: From Ben Noel.

Noel: I think you’ll have e-sports teams on college’s campuses, but might be fraternity versus fraternity.

Jarley: From Danny White

White: It could be a pretty cool thing, but it’s definitely not sport.

Jarley: From Mike Redlick

Redlick: Every indication is that it’s going to continue.

Jarley: From Rich Lapchick

Lapchick: I don’t think there’s a way to avoid it. It’s growing so quickly, it’s so lucrative. I think college sports is about money in a lot of ways.

Jarley: From Abiel Payano

Payano: Already, yeah, we already have teams that are entered in the relevant leagues for their games.

Jarley: It’s my podcast, so I get to go last…Spirit Splash, the best college campus tradition in the country didn’t start because university administrators decided to engineer an event for a young institution looking for new traditions. It started when kids jumped into the reflection pond, the university eventually got on board, despite the lawyers offering plenty of reasons to be against it. And now it’s hard to imagine UCF without it. Ditto for e-sports, students are jumping in. High schools are getting into e-sports, the university will catch up. People will figure it out because there’s too much money in it. It’s going to be a thing; it’s going to be a big thing. Probably outside the NCAA, but don’t be surprised to see us cheering on the UCF Gaming Knights at a competition someday soon similar to March Madness or the World Cup.

So, what’s your take? Check us out online and share your thoughts at business.ucf.edu/podcast. You can also find extended interviews with our guests and notes from the show. Special thanks to my producer Josh Miranda and the whole team at the Office of Outreach & Engagement here at the UCF College of Business.

The post Are eSports Really a Thing? appeared first on Barry S. Miller College of Business.

Paul Jarley:                         Russian hackers aren’t just messing with our elections, they’re disrupting the job application process, too. Companies like IKEA and Pepsi are hoping artificial intelligence will help cut hiring costs, but all this new technology may just be leading to more incivility in the job market. Prepare to be ghosted, my friends.

Paul Jarley:                         This show is all about separating hype from fundamental change. I’m Paul Jarley, dean of the College of Business here at UCF. I’ve got lots of questions. To get answers, I’m talking to people with interesting insights into the future of business. Have you ever wondered, “Is this really a thing?” On to our show.

Paul Jarley:                         To a graduating senior, the job market can be a scary place. If you think a 4% unemployment rate has eased these concerns, think again. Just pray that this horror story doesn’t happen to you.

“Ellen”:                                I got three interviews. I did all of them and I got called back for one from a local firm. I went to the second interview. They told me that, it was maybe on a Monday, and they told me they would reach out to me again by Friday. They even gave me the employment paperwork, and then they never reached out to me ever again.

Paul Jarley:                         Let’s just call her “Ellen.” But an incident like this?

“Ellen”:                                Nothing. Just completely ghosted me.

Paul Jarley:                         It’s a bit of shock to the ego.

“Ellen”:                                I figured that if they didn’t want me, they would at least tell me they didn’t want me.

Paul Jarley:                         What has that experience done to you?

“Ellen”:                                It was really frustrating because I put a lot into preparing for it. I was really excited about it. It’s discouraging.

Paul Jarley:                         Discouraging, but hardly new.

Stefanie Hill:                     I think with technology, there are so many platforms now and, depending on the business, you’re not paying for every single platform.

Paul Jarley:                         That’s Stefanie Hill, a Career Coach in our Office of Professional Development. She’s explaining how greater use of technology in the applicant screening process is leading to more ghosting by employers.

Stefanie Hill:                     An applicant tracking system is what employers use to track all of the applicants that come through and apply on their website. If you’re using that ATS, that’s great, but you have to drive traffic to you website, which a lot of employers don’t pay for extra marketing to do that. You’re gonna go on CareerBuilder, you’re gonna go on Indeed. If your organization doesn’t shell out thousands of dollars to pay for these different platforms, then they’re not communicating with your ATS. In that instance, you’re going on three different platforms. You would have to send rejection letters to all three different platforms, depending on who applied on which, and a lot of times with all of those applicants it’s hard for employers and recruiters, especially, to keep track of all of that

Paul Jarley:                         It’s just too much work to contact everybody.

Stefanie Hill:                     I believe so. I also think it depends on the means of how you’re communicating with somebody.

Paul Jarley:                         Sometimes when the employer calls, no one’s home. Given the pressures of time, the employer just moves on.

Stefanie Hill:                     If you’re doing that through a phone call or voicemail, nobody really checks their voicemail. They don’t clear their inbox for their voicemail. You can’t leave a voicemail. Why spend multiple times trying one person when five other people answered your first phone call? I also think that has to do with it, is really the timing around that. If you’re a recruiter, you need to meet numbers. If you’re not doing that quick enough, that’s a problem.

Paul Jarley:                         Laziness, rudeness, and time pressures do have their costs, though.

Lina Pabon:                        Never ever again. That tells me something.

Paul Jarley:                         That’s Lina Pabon, a Recruiter with ADP.

Lina Pabon:                        We’re one of the largest human capital management companies in the United States.

Paul Jarley:                         She would never work for a company that ghosts applicants.

Lina Pabon:                        I would never. Even if I had a friend who was interviewing or something, I would even be like, “Well, that was my experience with them?” Just as an FYI. It’s definitely a negative thing, especially at the level I was at. You’re telling me I’m moving to a second round, and then I never hear back. That’s not professional on their end.

Paul Jarley:                         But it’s not just the initial screening process that’s becoming automated. Meet Vera.

Vera:                                     Hello. My name is Vera. Thanks for your time.

Paul Jarley:                         She’s a robo-interviewer developed by a Russian company who works for both IKEA and Pepsi. I sat down for an interview with her.

Vera:                                     Are you ready?

Paul Jarley:                         Yes.

Vera:                                     Alright. For a start, tell me how do you grow the net promoter score of your accounts.

Paul Jarley:                         I hire smart people like Josh Miranda, who does these things for me.

Vera:                                     And by the way, what was the best customer service you have ever received?

Paul Jarley:                         I had a tailor who once measured me one day in my hotel room and delivered me three suits the next day.

Vera:                                     Hm. Me, too. Now, please, define the word “leadership” in one sentence, just without using the word “lead.”

Paul Jarley:                         It’s the ability to articulate a vision that motivates other people.

Vera:                                     Hm. Brilliant. I enjoyed our talk. I will get in touch with you by email by the end of this week. Have a prosperous day ahead.

Paul Jarley:                         Vera winked at me twice during the interview, but I don’t think we made a deep personal connection. I honestly don’t think she’s calling me back. Perhaps that lack of a personal touch leads to things like this.

“Casper”:                            My first urge is to ghost.

Paul Jarley:                         That’s another UCF student. Let’s call him “Casper.” In Casper’s experience, impersonal recruiting practices have led to cyber stalking and make some companies seem illegitimate.

“Casper”:                            On LinkedIn, you get just the most bizarre messages. You don’t have a very private account ’cause you’re trying to get that exposure. You get the startups and the questionable ventures that are like, “Oh, yeah, we’d love to have you!”

Paul Jarley:                         “Hi, we’re a pyramid scheme, would you like to join us?”

“Casper”:                            Yeah, yeah, exactly, exactly. I had a recruiter contact me saying, “Entrepreneur is looking for me to report to the CEO.” I mean, I’m flattered, but I just graduated with my accounting degree. Those things don’t add up. I’m suspicious. Whenever you just know it’s not really worth your time, it’s easy to just pass up on it.

Paul Jarley:                         How about a more reputable …

“Casper”:                            More reputable ones. My first urge, a lot of times- For example, on my LinkedIn, on my header it says, “I’m looking for public accounting in this market. I graduated here.” I would get offers on LinkedIn like, “Hey, we want to interview for this management training role in Orlando starting summer.” You just got all three of the things in my header wrong, so I had the urge to just ghost them because you’re not really paying attention to who you’re reaching out to.

Paul Jarley:                         Have you ever ghosted someone after they actually called you for an interview?

“Casper”:                            Just that recruiter for the one where they want me to be a controller. It wasn’t really worth my time. I mean, I had asked a couple more followup questions and the answers were not as through and through as I would have liked. I just kind of let it go.

Paul Jarley:                         Pay attention, employers. As Stefanie notes, Casper’s story is hardly unique.

Stefanie Hill:                     Applicants ghost for the purpose of, “I’m applying to a ton of jobs and you’re getting phone calls and you’re not answering those phone calls for whatever reason.” Definitely in the initial process when a company reaches out through phone screen, we’ve also seen seVeral students that my have gotten hired with a company. They’re expected to be in training or they’re currently in the organization and all of a sudden, they fall off the face of the Earth.

Paul Jarley:                         I’d really like to revoke their degrees.

Stefanie Hill:                     I think a big thing with that and why students are doing that, not necessarily students but just about everybody is doing that, is not only the competition, you may have just taken a job for the sake of taking it, but you like something better.

Paul Jarley:                         Casper adds:

“Casper”:                            You’re not sure if you wanna be that confrontational with somebody.

Paul Jarley:                         Ah, difficult conversation.

“Casper”:                            Yeah, exactly. A lot of times, my peers, they’ll have offers from not their first choice and they don’t want to decline it in case something happens, but they don’t wanna accept it, either.

Paul Jarley:                         A delay strategy.

“Casper”:                            A delay strategy, exactly. It’s easier to sit on it a little bit, keep it on the back burner.

Paul Jarley:                         Okay, let’s do some ghostbusting. Who you gonna call? Why, Stefanie Hill, of course. She says if you’re a job applicant:

Stefanie Hill:                     Really focus on your top five companies and try to get in with those companies. Follow up through email if you don’t hear back from them after a week of putting your resume in. Also, after your talks on the phone, after your interviews, respond back to that employer. Court them whenever they’re on campus. Anytime they come, the College of Business, we have employers everywhere. Really trying to court and follow up as much as possible is my biggest advice there.

Paul Jarley:                         If you’re an applicant thinking of ghosting an employer, Stefanie warns:

Stefanie Hill:                     It’s a small world and if you burn a bridge with one person, especially if you’re trying to stay within a certain industry, you’ll probably burn bridges with everybody in that industry because people talk.

Paul Jarley:                         As Lina notes, unthoughtful behavior like this tends to come back to haunt you later in your career.

Lina Pabon:                        If you didn’t get back, if you were unprofessional, people can remember that and it could potentially affect a future opportunity. You just never want to do that. You never want to hurt your future opportunities. All we need is an email. Not even a phone call. I appreciate it as an employer when a candidate does take the time to send me a quick email to thank me, just, “Thank you for considering me. I have accepted another opportunity.” I’m like, “Great, I wish you the best of luck.”

Paul Jarley:                         There’s no downside to class and civility.

Lina Pabon:                        Exactly.

Paul Jarley:                         Speaking of class, one last tip. If you don’t get the job, send them a thank you note anyway. You never know what might happen next.

Lina Pabon:                        To your point, you never know when that person’s gonna back out and you were the second or third or what have you. But you took the time to send out a thank you note, hopefully reiterate your interest, why you’re a good fit for the role, and they might think, “Well, this person, they were interested and they took the time. Let’s revisit that. Let’s see if they’re still available.”

Paul Jarley:                         Casper may be a ghost, but he’s got some advice for employers who don’t want people like him floating away to the competition.

“Casper”:                            Some of the online and automated systems won’t even respond, even whenever you submit. You don’t even get confirmations of it.

Paul Jarley:                         You don’t know if you submitted it properly.

“Casper”:                            Exactly, exactly. A lot of times, they just scan your LinkedIn or scan your PDF and upload a lot of it normally or automated. You’re not sure if it even incorporated correctly. You’re left wondering.

Paul Jarley:                         Because if you feel like you’ve been ghosted, well, you’re more likely to ghost them.

“Casper”:                            While I don’t take it personally, it makes me less inclined to want to respond to somebody else. They’re ghosting, why don’t I ghost, too? I feel almost as if I’m flogging myself by trying to write this really personal, “I’m sorry, but” email.

Paul Jarley:                         Lina points out in today’s world, getting a reputation as a ghoster, well, that’s gonna get you burned.

Lina Pabon:                        Nowadays with social media and Indeed and things like that, that’s gonna get out there and that’s gonna affect your branding. We have a best practice where we do try to get back with all of the candidates within three to five business days, whether that’s positive or negative.

Paul Jarley:                         Even if it’s automated, right?

Lina Pabon:                        Right, exactly. That’s what I was going to say. With automation now, it’s so easy to just send out an automated email saying, “You know, unfortunately, we’re not moving forward.”

Paul Jarley:                         To Lina, it’s all about the personal touch.

Lina Pabon:                        Having that personable touchpoint with them during the phone screen where I try to create that relationship so that I don’t get ghosted.

Paul Jarley:                         “Ghostbusters” puts it nicely.

Janine:                                  Do you believe in UFOs, astral projections, mental telepathy, ESP, clairvoyants, spirit photography, telekinetic movement, full trance mediums, the Loch Ness Monster, and the theory of Atlantis?

Winston:                              If there’s a steady paycheck in it, I’ll believe anything you say.

Paul Jarley:                         But it’s not 1984, and in today’s market, as Stefanie and I discuss:

Paul Jarley:                         Do students expect to be dated by employers today?

Stefanie Hill:                     Oh, for sure.

Paul Jarley:                         When you show up for that date:

Stefanie Hill:                     I think millennials are extremely focused on culture. I think that’s one thing that employers sometimes fail to focus on.

Paul Jarley:                         For a lot of applicants, they just won’t consider small companies. They’ll be thinking this.

Stefanie Hill:                     I’m not gonna call them back. That’s not a good opportunity.

Paul Jarley:                         One way companies could maybe reduce the likelihood of being ghosted by a UCF College of Business student would be to spend some time on campus, get students to know them, and the opportunities that they have because they’re not, say, Amazon.

Stefanie Hill:                     They want the employer to sell them because it’s so competitive.

Paul Jarley:                         Casper underscores the importance of a human showing up.

“Casper”:                            I would say be personable, mention their name, make it as unique as possible while not going over the top because the student wants to feel recognized and like they’re not wasting their time. I mean, not to cater to individuality too much, but mainly just show that you are a person on the other side. You’re not a company, you are a recruiter working for a company. You’re an individual and the more personable you make it, I think the more assume I realize, “Hey, I should be courteous to this person rather than blow off a company.”

Paul Jarley:                         Time to get to the bottom line. Is ghosting a thing? From our victim Ellen:

“Ellen”:                                I don’t think it’s in my nature to ghost. I just find it so incredibly rude.

Paul Jarley:                         From ghostbuster Stefanie Hill:

Stefanie Hill:                     Yes, definitely a thing.

Paul Jarley:                         From Lina Pabon:

Lina Pabon:                        Yes. Actually, on both ends.

Paul Jarley:                         From that ghost, Casper:

“Casper”:                            Ghosting, in general, is a real thing.

Paul Jarley:                         It’s my podcast, so I get to go last. Recruiting new employees is time-consuming and costly. It’s easy to understand why companies are looking to new technologies to help keep these costs in check, but it’s a seller’s market right now. People might put up with Vera in the application process when they’re desperate to find work.

Vera:                                     I could not hear your answer. Do you want to continue the dialogue?

Paul Jarley:                         But in an economy with a 4% unemployment rate, that personal touch might be the difference between landing your candidate or waiting by the phone for somebody to call back. Ghosting might be a thing, but it’s not inevitable. Be your own ghostbuster. Spend the time to engage and get to know people because it almost always pays off. What’s your take?

Paul Jarley:                         Check us out online and share your thoughts at business.ucf.edu/podcast. You can also find extended interviews with our guests and notes from the show. Special thanks to my producer, Josh Miranda, and the whole team at the Office of Outreach & Engagement here at the UCF College of Business, and thank you for listening. Until next time, charge on.

The post Ghosting in the Workplace: Is It Really a Thing? appeared first on Barry S. Miller College of Business.

Paul Jarley:                         This episode has bank robbers, bitcoin, blockchain, and bacon. Maybe those are the four Bs of Fintech? As it turns out, not all of them are a thing.

Paul Jarley:                         This show is all about separating hype from fundamental change. I’m Paul Jarley, dean of the College of Business here at UCF. I’ve got lots of questions. To get answers, I’m talking to people with interesting insights into the future of business. Have you ever wondered, “Is this really a thing?” Onto our show.

Paul Jarley:                         I have a murky past. I paid my way through graduate school by teaching macro and micro economics to inmates in a federal penitentiary. How I got that gig is a story for another day. Suffice to say, it’s not easy to get into a facility like that. Most of my students were drug dealers, counterfeiters, or tax evaders. My best student was a bank robber.

Paul Jarley:                         When I first heard of bitcoin and its alleged underworld origins I thought, “Yeah. Government’s gonna shut that down right away. It’s not going to be a thing.” Some South American countries like Bolivia and Ecuador have shut down bitcoin; many countries in the Muslim world have too.

Paul Jarley:                         Countries like China have made it difficult to trade, others like India and Canada have safeguards that keep it out of its banking system. But, here in the United States bitcoin is legal. Why? To answer that question I went to my resident hater of all government regulation.

Paul Jarley:                         Well, that’s a little harsh. He’s the director of the UCF Institute of Economic Competitiveness, Dr. Sean Snaith.

Paul Jarley:                         Hey, Sean. Got a couple of questions for you.

Sean Snaith:                       All right.

Paul Jarley:                         Sean is one of the most recognized people at UCF and his office is just down the hall from mine.

Paul Jarley:                         Why are cryptocurrencies like bitcoin legal? Doesn’t government have a monopoly on money production?

Sean Snaith:                       They do. The thing is, with bitcoin and other cryptocurrencies they really haven’t infringed greatly on the role of money as the medium of exchange that is official government money.

Paul Jarley:                         It’s not really legal tender is what you’re telling me?

Sean Snaith:                       No. I can’t be forced to accept bitcoin in payment. Now, if I was willing to, then we do see transactions where bitcoins functioning as the medium of exchange. But, it’s not widespread and that’s why I think the government is not sort of clamping down on bitcoin in a forceful way.

Sean Snaith:                       It’s not taking revenue away from the government that the government accumulates by being able to create money, which is a significant amount.

Paul Jarley:                         But, what about using bitcoin on a day-to-day basis?

Honghui Chen:                  From the time it started, initiated to it really is completely verified is an hour of wait time.

Paul Jarley:                         That’s Honghui Chen, UCF finance professor and leader of our emerging Fintech program. Hong is explaining that your typical bitcoin transaction takes about an hour to process; too long to pay for gas at the pump or your groceries in the checkout line.

Paul Jarley:                         He goes on to note that bitcoin has other draw backs as a medium of exchange, especially for small transactions.

Honghui Chen:                  The transaction cost is too high, because the cost to recall a transaction … doesn’t matter whether it’s one bitcoin or a Satoshi. Right?

Paul Jarley:                         By the way, a Satoshi is named after the alleged founder of bitcoin. It’s the smallest unit of bitcoin, it’s 100 millionth of a single bitcoin.

Honghui Chen:                  It’s the same record, same amount of work. I think maybe in the future if it happens it will be for large transactions, not for small transactions.

Paul Jarley:                         I just don’t see bitcoin becoming such a common medium of exchange that it’s going to worry the US treasury or the Federal Reserve. It’s more likely to be a niche product reserved for very large transactions, but even here price volatility may limit its usefulness.

Honghui Chen:                  There’s huge volatility. Another thing is people’s willingness, of business willingness and individuals’ willingness to accept bitcoin as payment.

Paul Jarley:                         Case in point, over drinks the other day two of my friends talked about the guy who mowed their lawn. He had worked for a person a few years back who had paid him in bitcoin, he later cashed that bitcoin into the tune of 250 thousand dollars.

Paul Jarley:                         Those turned out to be really expensive lawns to mow. Imagine the windfall or loss that might come from a much larger transaction, but where there is price volatility there is also speculation. I sought out a few of my investor friends to ask them what they think of bitcoin and whether they held any as part of their investment portfolio.

Jim Balaschak:                   Well, bitcoin is highly speculative.

Paul Jarley:                         That’s Jim Balaschak, principle at Deanja LLC and a hall of fame member. Jim’s not buying bitcoin.

Jim Balaschak:                   I think that it’s been driven up by a lot of people just following the trend and there’s no real, underlying earnings factor. No PE, no forward growth that you can measure, and I think that just makes it too speculative to me.

Paul Jarley:                         Is there another kind of crypto currency that you prefer that you think is a worthy investment of one kind or another because it’s backed by something? Could you give me just some sense of what that is?

Jim Balaschak:                   I haven’t really looked at detailed … There was one that came out from Oscar Mayer a few weeks ago called “Bacoin”, backed by bacon. That seemed to at least have something-

Paul Jarley:                         Like, linked to the commodity market for pork?

Jim Balaschak:                   I think just linked to … I think it was just really a promotion thing.

Paul Jarley:                         Now, bitcoin backed by bacon. That’s something I can get behind, but Jim’s main point is that without something tangible backing bitcoin it’s just too speculative for his blood.

Paul Jarley:                         My friend Mike O’Donnell on the other hand does invest in bitcoin. Mike, like Jim, is a member of our college of business hall of fame and is a serious investor.

Paul Jarley:                         Mike, why invest in bitcoin? Why not just invest in gold? It seems like a lot of work.

Mike O’Donnell:              Well, the reason I invested in it really was because there was a guy who was one of the original people in Facebook and a really smart guy. I think the longest executive and he’s now maybe one of the top experts if not the top expert in the world in cryptocurrency.

Mike O’Donnell:              He said it took him 18 months to understand it and he said, “I don’t know for sure …” Because, nobody does, “Whether or not it’s gonna succeed or not succeed, but I’m recommending that anybody with wealth invest 1% of their assets in this asset class.” Because, it had a high potential for a massively high return in these early stages.

Paul Jarley:                         Mike’s willing to devote a tiny part of his portfolio to a speculative investment and let it ride. He’s not worried about whether people can predict day-to-day or even annual fluctuations in price, but other people like David Metcalf are.

David Metcalf:                  There’s been two [inaudible 00:06:47] that I’ve watched.

Paul Jarley:                         David is a senior researcher for the institute of simulation and training here at UCF.

David Metcalf:                  Of course, just general supply and demand and hype being put on something like Gartner’s Hype Curve and kind of see where it falls in the now. But, the other thing that I’ve watched closely is when there’s been currency destabilization.

David Metcalf:                  Like right after Cyprus and right after the austerity movements in Greece where there was flight of capital. Safe places for some people to put and store their wealth, versus the fee at currency. That was one of the main uses for other cryptocurrencies.

Paul Jarley:                         In this sense, cryptocurrency may act a lot like gold, which is also seen as a hedge against currency risk. This flight to safety is also emphasized by Alexander Golding, a serial entrepreneur and thought leader on crypto currency and social enterprise.

Alex Golding:                    A safety play, I definitely see that. I think that the 10% daily price range we see here in bitcoin is much less than the devaluation of the Zimbabwean dollar or the Venezuelan bolivar or some other currencies.

Alex Golding:                    Furthermore, in terms of how do we measure and devaluate the price of bitcoin? There are some people who are trying to do that and they produce institutional grade research. They’ve figured out how some of these scientists are modeling the price of bitcoin and how people are coming to these price forecasts.

Alex Golding:                    I personally think that a lot of it is driven by hype, I don’t think anyone can deny that a lot of it’s driven by hype. But, I still believe in it though. I still think that the acceleration of wealth that has happened because of cryptocurrencies will inspire a huge amount of innovation, and scientific, and entrepreneurial experimentation.

Paul Jarley:                         Alexander’s faith in bitcoin as a source of inspiration strikes me as a very long play. Bitcoin’s not the sort of investment I’m planning on including in my retirement portfolio.

Paul Jarley:                         If bitcoin isn’t likely to be a significant medium of exchange and it’s too speculative for most investors, what problem is bitcoin really solving? Back to Honghui.

Honghui Chen:                  The main problem it solves is the trust problem making a transaction. Usually when two parties are doing transaction, if they are not face-to-face usually they need an intermediary.

Honghui Chen:                  With bitcoin you do not need the intermediary, because it has a shared network. The system can provide the trust that we usually need to find from an intermediary.

Paul Jarley:                         We’ve heard a little now about blockchain, it’s the technology that powers bitcoin. But, what exactly is it? Jim Balaschak had a pretty good explanation.

Jim Balaschak:                   Block chain is a distributed ledger that goes back to verify a transaction publicly across many computers, no one person can-

Paul Jarley:                         Erase things from the ledger.

Jim Balaschak:                   … erase or validate all by themselves. It’s a distributed ledger. The blockchain technology is good, it eliminates a lot of middle men, it could save more fees for transactions in the futures that are needed for bankers or lawyers to let’s say, transfer a title of a house down in the future.

Paul Jarley:                         It has applications outside of finance? Like voting?

Jim Balaschak:                   Yes.

Paul Jarley:                         For example, in voting systems. That you could verify that people voted and there wouldn’t be questions about who voted and did they vote multiple times and what not?

Jim Balaschak:                   Right. The company I’m invested in, their blockchain technology that they’re using is on facial recognition. So that they will have an algorithm for everybody’s face that buys a token and that can be used to validate their ID for different transactions.

Paul Jarley:                         If bitcoin promotes transparency, why is there this perception that bitcoin protects anonymity and that it was used by drug dealers to mask their transactions?

Honghui Chen:                  I think there’s some misconception of the bitcoin. Actually, it can be traced. If I were a drug dealer I don’t want to use bitcoin, because they’ll trace.

Honghui Chen:                  In the bitcoin network, every money goes into an address, public key. Every transaction where the money goes in the future, you can trace out. There is a tree.

Paul Jarley:                         It’s actually more transparent?

Honghui Chen:                  Yes. Very transparent. While you do not know exactly the identity that is behind each so called public address, but with Big Data I’m sure it’s very easy to figure out who is doing what.

Paul Jarley:                         Mm-hmm (affirmative). Security, transparency, trust, elimination of the middle man. There’s a lot to like there, but even sophisticated technology like bitcoin and blockchain can’t save people from themselves.

Paul Jarley:                         As Honghui explains, there’s the issue of keeping track of your 64 digit random key that gives you access to your bitcoin wallet.

Honghui Chen:                  You can write it down. It’s silly. You can store in a digital wallet. You have to have a wallet to access your bitcoin. It has to reside on a computer or your smartphone. Have a disk failure could cost loss as well. So, yes.

Honghui Chen:                  But, I think for many individuals it’s really, how do you remember your private key?

Paul Jarley:                         Does that explain … I thought I read an article, maybe it was a month or so ago about the first theft of bitcoin. That somebody had engaged in a bitcoin heist.

Honghui Chen:                  Yeah. So-

Paul Jarley:                         They must have stole their key. Is that-

Honghui Chen:                  Yes. Stole your key and they hack into your-

Paul Jarley:                         Computer or cellphone?

Honghui Chen:                  Yeah. Yeah. Exchanges can be hacked, because with lots of exchanges you just … For us, we just store our wallet remotely and if they have a … To access the wallet you have to have some password. Right?

Paul Jarley:                         Right.

Honghui Chen:                  Maybe some people store it in your email account. The email is not so secure. Right?

Paul Jarley:                         Right.

Honghui Chen:                  You get into your email account, your computer, and then it can be gone.

Paul Jarley:                         And then, there’s this warning from Sean Snaith.

Sean Snaith:                       You have a bitcoin purse and their exchanges, but one of those disappeared in Japan and guess what? All the bitcoins are gone. There’s no FDIC for bitcoin, your deposits are not ensured.

Paul Jarley:                         We’ve covered a lot of ground in this podcast and it’s time to get to the bottom line, is bitcoin really a thing? Will students need to know something about bitcoin and block chain to be considered financially literate in today’s world or can they just skip it?

Honghui Chen:                  In two or three years I think, “Hey, you are a finance major. You don’t know FinTech?” (laughs)

Paul Jarley:                         Sean agrees.

Sean Snaith:                       I think bitcoin and the technology that’s behind it is something that students should learn about.

Paul Jarley:                         From Jim Balaschak.

Jim Balaschak:                   I do think that it is a thing, because there are a lot of people who are putting their money it.

Paul Jarley:                         From Alexander.

Alex Golding:                    I’m a longterm believer in bitcoin as an investment.

Paul Jarley:                         From Mike O’Donnell.

Mike O’Donnell:              I don’t want to learn about cryptocurrency at this point in my life. You’re gonna have to, because it’s happening.

Paul Jarley:                         From David.

David Metcalf:                  We’ll see if they still know the name bitcoin, but I think they’ll definitely know blockchain and cryptocurrencies in general.

Paul Jarley:                         It’s my podcast, so I get to go last. Let’s be clear, bacon is most certainly a thing, bitcoin on the other hand might be to blockchain what Netscape was to the internet.

Paul Jarley:                         In the early days, if you wanted to get on the internet you used Netscape. It was the browser, but Netscape couldn’t keep pace with upstart competition and was eventually replaced by better browsers. I suspect the same will be true for bitcoin, it’s an early adopter of blockchain that will likely give way to more sophisticated cryptocurrencies and platforms.

Paul Jarley:                         Blockchain most certainly appears to be a thing, bitcoin? Not so much. What’s your take? Check us out online and share your thoughts at business.ucf.edu/podcast. You can also find extended interviews with our guests and notes from the show.

Paul Jarley:                         Special thanks to my producer Josh Miranda and the whole team at the Office of Outreach and Engagement here at the UCF College of Business. Thank you for listening. Until next time, charge on.

The post Is Bitcoin Really a Thing? appeared first on Barry S. Miller College of Business.

“Is This Really a Thing?” is an all new podcast created and hosted by Paul Jarley, dean of the College of Business at the University of Central Florida. With the help of local experts, enthusiasts and all-around interesting people, Paul takes a look at up-and-coming concepts and ideas that have the potential to reshape the business landscape.

How do you separate fly-by-night management tactics or money pits from legitimate innovations? What will students need to learn about to be successful over the next decade? Is Bitcoin a thing? How about eSports?

Paul decided to chase down the answers to these questions that keep him up at night and pose the question… Is This Really a Thing?

Coming to your favorite podcast app in mid-September.

The post Is This Really a Thing? Trailer appeared first on Barry S. Miller College of Business.